Marketing

Questions about the Community Supported Agriculture (CSA) Model of Direct Marketing? Attend a Virtual Mini-Conference October 25, 2021

by: Eric Richer, OSU Extension Educator

There are many options when it comes to direct marketing farm-raised products. One of those option is using the Community Supported Agriculture (CSA) model whereby customers buy a weekly ‘subscription’ of fresh produce, meat, eggs, etc. If you have interest in learning more about this model of direct marketing, you may consider attending the virtual mini-conference Thinking Inside the Box: Growing CSA’s Across the Tri-State Region.

The mini-conference will take place on Monday, October 25, 2021 from 8:30 am – 12:00 noon EST on Zoom.  This conference is free but registration is required to receive the conference link (registration: www.go.osu.edu/virtualcsaconference2021). For questions, contact Christie Welch welch.183@osu.edu or Anna Adams adams.2061@osu.edu. The deadline for registration is October 22, 2021.

Breakout room topics will include starting a CSA, scaling up your CSA, implied warranty (legal) information, and choosing an online platform to manage your CSA. Speakers will include OSU Extension Specialists and CSA farmers from across the Tri-state region. A keynote session entitled You Have What It Takes: Grit, Growth, and Gumption on the Small Farm will feature Dan & Julie Perkins of Good Earth Farm https://perkinsgoodearthfarm.com/ in Indiana.

USDA ERS Feed Outlook

by: Chris Zoller, Extension Educator, ANR, Tuscarawas County

In the USDA Economic Research Service (USDA-ERS) Feed Outlook released August 16, U.S. corn production was lowered due to a reduced yield forecast from the National Agricultural Statistic Service (NASS).  This projection, along with tight ending stocks raised the expected average corn price to $5.75 per bushel.

NASS puts the national corn yield at 174.6 bushels per acre.  This is a reduction from the 179.5 bushels per acre projected in the previous month’s forecast.  The harvested acres remained unchanged from the June Acreage Report at 172 bushels per acre.  The figure below is a forecast of corn yield by state for 2021.

Since planting, weather conditions have been mixed throughout the corn producing states.  Some areas have experienced drought, while others have had significant rainfall.  Record yields are possible in Ohio, Indiana, Michigan, New York, Pennsylvania, Oklahoma, and California.  If realized, at 214 bushels per acre, Illinois would set a state record.

U.S. Corn Utilization

Domestic corn use for the 2020-2021 marketing year is projected to increase 40 million bushels over July.  Looking ahead to the 2021-2022 marketing year, domestic use is reduced by 90 million bushels.

The latest USDA-ERS report expects increases in the amount of corn used for food, seed, and industrial (FSI) processing.  The figure below explains corn utilization during the marketing years 1990 – 2020.

Summary

Many factors including weather, exports, and usage can change between now and harvest.  Some of these factors are out of your control, but farmers are encouraged to seek marketing opportunities that maximize return.

The complete report is available here: https://www.ers.usda.gov/webdocs/outlooks/101863/fds-21h.pdf?v=3600.5.

Examining COVID-19 Financial Assistance to Farms and Farm Households

by: Chris Zoller, Extension Educator, ANR

Click here for PDF version of this article

Every individual, family, and business has been impacted by the COVID-19 pandemic.  A national emergency was declared in March 2020 because of the pandemic and the federal government responded by creating financial assistance programs to counter the economic impacts.

The United States Department of Agriculture Economic Research Service (USDA-ERS) released a working paper, Financial Assistance for Farm Operations and Farm Households in the Face of COVID-19.  The study estimates the direct assistance to farms and farm households in 2020.

The USDA-ERS researchers used data from USDA Farm Bill and the Market Facilitation Program (MFP).  Other data sources included the USDA Agricultural Resource Management Survey, U.S. and State-Level Farm Income and Wealth Statistics, Farm Service Agency (FSA), Natural Resources Conservation Service (NRCS), Risk Management Agency (RMA), Small Business Administration (SBA), and the Department of Labor (DOL).

Because of space limitations, only report highlights are presented in this article.  The complete working paper is available here:  https://www.ers.usda.gov/webdocs/publications/101712/ap-090.pdf?v=3375.

In 2020 there was a substantial increase in the amount of government payments to farm operations.  When compared to 2019, the estimated increase is $23.8 billion (see Figure 1).

A total of six economic relief and stimulus bills were passed, with farm operations receiving economic assistance from three in 2020.  These included the Coronavirus Food Assistance Program (CFAP), Paycheck Protection Program (PPP), and the Economic Injury Disaster Loan (EIDL) program.

Coronavirus Food Assistance Programs

There were two Coronavirus Food Assistance Programs (CFAP 1) and (CFAP 2) administered by USDA.  The CFAP programs made direct payments to producers who saw commodity price declines, market disruptions, additional production costs, and reduced prices because of the pandemic.

Combined, the CFAP programs paid $23.7 billion to farmers and ranchers.  The USDA-ERS analysis shows that 49 percent of the $23.7 billion was distributed to livestock and livestock product production and 51 percent to crop production enterprises.

Paycheck Protection Program

Administered by the Small Business Administration (SBA), the PPP was put in place to help farmers and small businesses retain employees and/or rehire furloughed workers.  Analysis shows that $5.9 billion was paid to farm operations.  Publicly available data from the Small Business Administration shows 64 percent ($3.8 billion) was received by crop farmers and 36 percent ($2.1 billion) by livestock producers.

 Economic Injury Disaster Loan and Loan Advance

Farm operations with 500 or less employees were eligible to apply for the Economic Injury Disaster Loan and Loan Advance (EIDL).  These operations could receive up to $150,000 in low-interest non-forgivable loans and up to $10,000 ($1,000 per employee) in forgivable loans.  These loans and advances could be used for fixed costs, payroll, and other bills.

The SBA opened the EIDL applications exclusively for agriculture in May 2020.  While the SBA did not provide industry-specific data about EIDL advances, data from PPP applications indicated farm operations claimed 736,451 agricultural employees.  If we assume all PPP applicants claimed the maximum advance of $1,000 per employee, EIDL advances could have been $736.5 million.  However, this total would not have been in addition to the $5.9 billion under the PPP loans because the amount forgiven through PPP was reduced by the EIDL amount.

Related Assistance Programs

Farm families could have received financial assistance through the Economic Impact Payments (often referred to as stimulus payments) and the Federal Pandemic Unemployment Compensation program.

USDA-ERS researchers made certain assumptions when determining payments made through the Economic Income Payment program and estimated the total disbursed to farm households through this program was $4.3 billion.

Non-COVID-19 Related Financial Assistance

Direct payments were made to some farms in 2020 through existing USDA programs established in the 2018 Farm Bill.  Programs designed to respond to market price changes include Agriculture Risk Coverage (ARC), Price Loss Coverage (PLC), and Market Assistance Loan programs.  Additional assistance programs included Environmental Quality Incentive Program (EQIP) and the Dairy Margin Coverage (DMC) program.  The USDA-ERS researchers also included MFP, Wildlife and Hurricane Indemnity Program (WHIP), and the Federal Crop Insurance Program payments in their analysis.

Total Financial Assistance

The analysis conducted by USDA-ERS estimated that in 2020 a total of $57.7 billion was distributed to farmers and farm households through standing, ad-hoc, and COVID-19 programs.  Researchers estimated that more than 50 percent of the estimated total payments made directly to farmers and farm households came from COVID-19 related programs in 2020.  The CFAP 1 and CFAP 2 programs were the largest, having paid $23.7 billion to farm businesses.

Source:

United States Department of Agriculture Economic Research Service, COVID-19 Working Paper: Financial Assistance for Farm Operations and Farm Households in the Face of COVID-19, July 2021, https://www.ers.usda.gov/webdocs/publications/101712/ap-090.pdf?v=3375

Soybean Production Costs & Returns in the U.S. and Ohio

by: Chris Zoller, Extension Educator, ANR

Click here for PDF Version

The United States Department of Agriculture Economic Research Service (USDA-ERS) recently released a report of costs and returns for U.S. soybean production between 2012 and 2020.  During the period examined, the total cost of producing one acre of soybeans increased 14 percent in the United States.  During the same time, the returns to growers decreased by 14 percent (Figure 1.).

 

Prices Received and Return to Growers

Prices paid to U.S. soybean producers between 2012 and 2020 ranged from a low of $8.61 per bushel in 2018 and 2019 to a high of $14.21 per bushel in 2012 (Table 1).  Total production costs, including operating and overhead, increased $62 per acre between 2012 and 2020.  The largest cost increases during this period were attributed to machinery/equipment and the opportunity cost of land.  The per acre returns in 2020 were greater than the cost of production for the first time in three years.

Table 1. Gross returns per acre and soybean price per bushel, U.S. soybean producers 2012-2020.

Year Gross Returns per Acre (excluding gov’t. payments) Price per Bushel at Harvest
2012 $597 $14.21
2013 $571 $13.28
2014 $522 $10.88
2015 $431 $8.97
2016 $492 $9.46
2017 $454 $9.28
2018 $458 $8.61
2019 $429 $8.61
2020 $515 $9.67
Average $496 $10.33

(Source: USDA-ERS, May 2021 and June 2021)

Soybean Returns and Costs – Ohio Farm Business Analysis & Benchmarking Program

Ohio State University Extension utilizes the FINPACK software program to complete a financial analysis of farms enrolled in the Ohio Farm Business Analysis and Benchmarking Program.

Returns

This program calculates revenue (yield x price) and adds crop insurance income and “other” crop income to calculate the gross return per acre.  Other crop income can include sale of crop byproducts such as soybean fodder or income from programs directly related to that year’s crop.  Income from government programs such as ARC or PLC are not included in other crop income.  During this analysis period, average soybean prices received by participating farms ranged from a low of $8.85 per bushel (2018) to a high of $14.09 per bushel (2012).  Revenue from crop insurance and other crop income categories ranged from a low of $.08 per acre in 2013 to a high of $80 per acre in 2019.

Expenses

The FINPACK program calculates direct and overhead expenses.  Examples of direct expenses include seed, fuel, fertilizer, chemicals, crop insurance, operating interest, and labor.  Overhead costs are incurred simply because you own equipment, buildings and land, and must be paid regardless of whether a crop is planted.  Examples include hired labor that is not crop-specific, property taxes, farm insurance, non-current interest, and depreciation.

Financial Performance of Ohio Soybean Farmers

The following table is the returns and expenses of all soybean enterprises in the OSU Extension analysis.

Table 2. Average gross returns, total expenses, net return per acre, and soybean price received for owned and rented soybean acres, Ohio Farm Business Analysis and Benchmarking Program, 2012 – 2019.

Owned Land Rented Land
Year Gross Return/Acre (Owned Land) Total Expenses/Acre (Owned Land) Net Return/Acre (Owned Land) Price/Bushel

 (Owned Land)

 Gross Return/Acre (Rented Land) Total Expenses/Acre (Rented Land) Net Return/Acre (Rented Land) Avg. Price/Bushel

Received (Rented Land)
2012 $641 $422 $218 $14.09 $654 $452 $201 $13.88
2013 $599 $443 $156 $13.08 $594 $435 $158 $12.94
2014 $548 $446 $102 $10.07 $502 $423 $79 $10.29
2015 $428 $396 $32 $8.83 $426 $432 -$4.95 $9.37
2016 $510 $413 $97 $9.30 $508 $442 $66 $9.42
2017 $493 $401 $91 $9.54 $491 $462 $28 $9.55
2018 $546 $423 $123 $8.95 $554 $443 $110 $8.85
2019 $498 $445 $52 $8.87 $512 $454 $58 $8.90
Ave. $532 $423 $108 $10.34 $530 $442 $86 $10.40

The Ohio Farm Business Analysis and Benchmarking Program also separates the financial performance of the high 20 percent of soybean enterprises for the farms (sorted by net return per acre) who provided data.  Table 3 summarizes financial performance of the high 20 percent in each year for which data is available.

Table 3. Average gross returns, total expenses, net return per acre and soybean price received for owned and rented soybean acres, high 20% of farms sorted by net return per acre, Ohio Farm Business Analysis and Benchmarking Program, 2012 – 2019.

 

  Owned Land Rented Land
Year Gross Return/Acre   Total Expenses/Acre   Net Revenue/Acre   Avg Price/Bu.   Gross Return/Acre Total Expenses/Acre   Net Revenue/Acre   Price/Bu.  
2012 $875 $397 $477 $15.21 $862 $448 $414 $15.13
2013 ND1 ND1 ND1 ND1 ND1 ND1 ND1 ND1
2014 $702 $390 $311 $10.29 $654 $398 $256 $10.48
2015 $477 $292 $185 $9.89 $469 $355 $114 $10.22
2016 ND1  

ND1

  

ND1

  

ND1

 $587 $377 $209 $9.76
2017  

ND1

  

ND1

  

ND1

  

ND1

 $537 $408 $128 $9.81
2018 $616 $368 $247 $9.06 $615 $377 $238 $8.94
2019 $616 $411 $205 $9.15 $575 $389 $185 $8.90
Ave. $657 $371 $285 $10.72 $614 $393 $194 $10.46

(Source: Ohio Farm Business Analysis & Benchmarking Program, 2012-2019)

1 No data available for a high 20% group

Comparing the Data

The average price per bushel received for each group, 2012-2019:

  • S. soybean producers from the USDA-ERS analysis was $10.41
  • Ohio soybean growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (owned land) was $10.34
  • Ohio soybean growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (rented land) was $10.40
  • High 20% of Ohio soybean growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (owned land) was $10.72
  • High 20% of Ohio soybean growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (rented land) was $10.46

When comparing the gross returns of U.S. and Ohio soybean growers, 2012 – 2019:

  • The gross return/acre for U.S. soybean producers from the USDA-ERS analysis was $494 per acre
  • Ohio soybean growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (owned land) averaged $532 per acre
  • Ohio soybean growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (rented land) averaged $530
  • Top 20% of Ohio growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (owned land) averaged $657 per acre
  • Top 20% of Ohio growers enrolled in the Ohio Farm Business Analysis and Benchmarking Program (rented land) averaged $614 per acre

USDA-ERS did not provide the per acre soybean costs in their report.  The per acre expenses for soybean enterprises in the Ohio Farm Business Analysis and Benchmarking Program (2012 – 2019) reported:

  • All enterprises (owned land) averaged $423
  • All enterprises (rented land) $442
  • Top 20% group (owned land) $371
  • Top 20% group (rented land) $393

The USDA-ERS analysis did not report the net returns of growers.  When comparing the net returns of soybean enterprises of Ohio participants in the Ohio Farm Business Planning and Analysis Program (2012 – 2019):

  • All enterprises (owned land) averaged $108/acre
  • All enterprises (rented land) averaged $86/acre
  • The top 20% group (owned land) averaged $285/acre
  • The top 20% group (rented land) averaged $194/acre

Summary

Like all farm commodities, the revenue and expenses associated with growing soybeans is constantly moving.  However, based on the summary of farms enrolled in the OSU Extension Ohio Farm Business Analysis and Benchmarking Program, implementing management practices to achieve the high 20 percent category can improve returns and profitability.

For additional information about soybean production in Ohio, consult with your OSU Extension Educator and view the OSU Soybean and Small Grain Website at https://stepupsoy.osu.edu/soybean-production, and the Ohio Agronomy Guide at https://stepupsoy.osu.edu/soybean-production/ohio-agronomy-guide-15th-edition.

If you are interested in learning more about the OSU Extension Ohio Farm Business and Analysis Benchmarking Program, visit https://farmprofitability.osu.edu/.  Growers are also encouraged to use OSU Extension Farm Budgets available at https://farmoffice.osu.edu/farm-management/farm-budgets.

Sources:

Ohio Farm Business Analysis & Benchmarking Program, 2012 – 2019, https://farmprofitability.osu.edu/

USDA-ERS Charts of Note, June 2021,  https://www.ers.usda.gov/data-products/charts-of-note

USDA-ERS Commodity Costs and Returns, May 2021, https://www.ers.usda.gov/data-products/commodity-costs-and-returns/

What is the WASDE Report and Why is It Important?

by: Chris Zoller, Extension Educator, ANR, Tuscarawas County

Click here for PDF of this article

The World Agricultural Supply and Demand Estimates (WASDE) report is prepared monthly by the Interagency Commodity Estimates Committees (ICECs) which are chaired by representatives from the Agricultural Marketing Service, Economic Research Service, Farm Service Agency, and Foreign Agricultural Service.  The National Agricultural Statistics Service provides data about U.S. production and each ICEC (one for each of nine commodities) compile and analyze data from U.S. and foreign sources to produce the report.

The WASDE report is prepared under very tight security in a “lock-up” area inside a USDA building.  On the day of the report release, doors in this room are secured, window shades are closed, and telephone and internet communication blocked!  Analysts attending the meeting must present their credentials to a guard before entering to finalize the report.  The WASDE report is released at 12:00 noon Eastern time, and not a minute sooner.

Who Provides Information?

The Interagency Commodity Estimates Committees described earlier use information from a variety of USDA sources.  The National Agricultural Statistics Service provides data related to U.S. crop and livestock production.  The USDA Foreign Agricultural Service, official data from foreign governments, satellite imagery, and weather data are also provided about foreign crop and livestock production and use.

All of this information is reviewed by ICEC members with broad expertise and perspective.  To arrive at a consensus about the forecasts, the committee considers alternate assessments of domestic and foreign supply and use.

Commodity Balance Sheets

Do you remember back to your introductory economics class?  One of the basic principles taught was supply and demand (see graph below).  Those who develop the WASDE report use information to provide the agricultural industry with a baseline for supply and demand of given commodities.  If a large supply is anticipated (think of it as a bumper yield), but domestic or foreign demand is not high, the result is lower prices. On the flip side, a poor harvest (lower quantity) combined with increased demand results in increasing commodity prices.  We have seen commodity markets move up or down within minutes of a WASDE report being released.

A balance sheet for U.S. and world wheat, rice, coarse grains, oilseeds, and cotton is provided.  Coarse grains include corn, barley, sorghum, and oats).  Oilseeds include soybeans, rapeseed, and palm).  The U.S. also reports sugar, meat, poultry, eggs, and milk on the balance sheet.   Separate estimates are provided for components of supply and demand and domestic use is divided into major categories (for example, corn for feed and corn for ethanol use).

Of interest to many is the reported season-average farm price for farm commodities.  Price forecasts are made by experts who carefully analyze the supply and demand sides of the balance sheet, along with commodity models, and in-depth research of domestic and international issues.

Why is the WASDE Important?

Agriculture operates in a global market and supply and demand are constantly changing.  A monthly balance sheet of major commodities provides farmers, industry professionals, and others a current source of information.

Not everyone agrees with every number reported in each WASDE, but everyone should feel confident that a tremendous amount of research and time are invested to provide the most accurate report possible.

Where Can I Read the WASDE Reports?

Current and historical (since 1974) WASDE reports are available here: https://www.usda.gov/oce/commodity/wasde.  These reports are approximately 40 pages in length, but an approximate five-page summary of coarse grains, oilseeds, and cotton is provided at the beginning of the report.  Detailed data tables accompany the report.

Sources:

WASDE FAQs, United States Department of Agriculture, https://www.usda.gov/oce/commodity-markets/wasde/faqs

WASDE Report, United States Department of Agriculture, https://www.usda.gov/oce/commodity/wasde

 

 

USDA ERS Dairy Forecasts for 2021 & 2022

by: Chris Zoller, Extension Educator, ANR, Tuscarawas County

On June 16, the United States Department of Agriculture Economic Research Service (USDA ERS) released its Livestock, Dairy, and Poultry Outlook.  This publication (https://www.ers.usda.gov/webdocs/outlooks/101460/ldp-m-324.pdf?v=4393.1) provides projections about inventory, use, and pricing.  The next report will be released July 16, 2021.

2021 Dairy Forecast

Recently, milk cow numbers have been trending upward.  USDA ERS projects milk cow numbers to average 9.495 million head, an increase of 25,000 from their May projection.  Because of low cow slaughter numbers and higher feed prices, USDA ERS projects that cow numbers will level off during the second half of 2021.  Extreme heat and its effects on cow comfort and grain production caused USDA ERS to lower its milk per cow slightly for the third quarter, putting annual production per cow at 24,065 pounds.

Reduced cheese prices and higher expected dry whey prices have USDA ERS projecting the following milk prices for 2021:

 

Class Price
Class III $17.45/cwt.
Class IV $15.85/cwt.
All-Milk $18.85/cwt.

 

2022 Dairy Forecast

While the number of cows is expected to average 30,000 more than the May projection, USDA ERS puts cow numbers for the year at 9.495 million head, unchanged from 2021.  High input costs and lower expected milk price in mid-2021 translates into a decline in 2022 of milk cow numbers from the levels seen in the second half of 2021.  Milk per cow is expected to increase slightly in 2022, 24,335 pounds.

A projected stronger economy in 2022 should result into positive news for domestic use.  Additionally, international demand for U.S. lactose and whey products is expected to contribute to an increase over the May projection.

USDA ERS makes these projections for milk price in 2022:

 

Class Price
Class III $17.15/cwt.
Class IV $15.95/cwt.
All-Milk $18.75/cwt.

Planning

Once again, the dairy farm economy is going to be tight for the remainder of 2021 into 2022.  Dairy farmers are encouraged to closely monitor expenses, evaluate inputs, and meet with trusted advisors.  The Ohio State University Dairy Excel 15 Measures of Dairy Farm Competitiveness  (https://dairy.osu.edu/sites/dairy/files/imce/2019%2015%20Measures%20of%20Dairy%20Farm%20Competitiveness%20Final%20%281%29.pdf) bulletin is an excellent resource that allows dairy farmers to compare performance against established benchmarks.

What’s going on with Lumber Prices?

by: Brent Sohngen, Professor Environmental and Natural Resource Economics.

This article was originally published at: https://u.osu.edu/aede/2021/05/08/whats-going-on-with-lumber-prices/

In case you haven’t noticed, lumber prices have increased a lot over the last year.  Based on the US Bureau of Labor Statistics Lumber Price Index, which you can find here, lumber prices have increased 180% since April, 2020.  This increase started last fall, and has continued ever since. So, why have they risen, and how high will they go?

Let’s start with the first question, why have they risen?  The economic explanation is relatively straightforward: Demand rose rapidly due to pandemic related building, and supply is really inelastic, as we say in economics.  Thus, while the demand of wood has increased dramatically, the supply of wood hasn’t been able to keep up.  Let’s break this down.

Consider the demand side first.  The construction sector, specifically building and remodeling houses, is one of the largest demanders of lumber in the US and around the world.  New home starts and construction spending cratered at the beginning of the pandemic, but they rebounded pretty quickly.  Remodeling in particular seems to have picked up a real head of steam.

While demand for new construction and remodeling is hot, it’s actually now at about the same level as before the pandemic. So something else must be going on.  One of those something else’s is the price of steel, which has also increased dramatically in the US. Steel is a substitute for wood, especially in commercial construction, and rising steel prices have also driven up demand for lumber and other things that can be made out of wood or steel.

Ok, so the demand side is going crazy.  What about supply?

The supply side in forestry is really inelastic. That is, it’s hard to make big increases in supply in short periods of time.  There are lots of reasons for this.

First, you can’t build a lumber mill overnight.  And after some mills slowed down during the depths of the pandemic, and others closed, it’s not as simple as just turning the key to start the remaining ones back up.  You need trained workers, the machines are pretty complicated and may need some maintenance work before re-starting production, and you need logs.

Second, getting logs is not easy either.  There is a whole complicated supply chain associated with delivering logs to mills that itself has been affected by the pandemic.

Third, the supply of logs is super-inelastic because of the way trees grow.  Plantation trees, which supply around 50% of our timber in the US, put on a lot of value in the 5-10 years before they are harvested. Most people who own these trees don’t want to cut them too early because they’ll miss this value growth, which could be 8-12% or more per year.

When plantation trees are cut, they actually are still growing, perhaps 6% or more per year, so if prices start rising really quickly, many landowners may actually hold them longer than they would otherwise because they get some nice volume growth plus the price growth.   So when prices rise rapidly as they are now, the supply of logs contracts a bit because landowners hold onto their trees.  Seems strange, but the value growth that occurs with the rising prices gives people who own trees a real reason to put off logging for a while.

Fourth, the supply of logs from our main source of imported lumber, Canada, is super inelastic because most supply there is from public lands, and is controlled by government allowable cut constraints. These allowable cut constraints are set administratively, not economically, and thus limit their ability to increase supply in times of high demand.

There are some other issues at play, including US tariffs on wood, but most of this dramatic increase in prices is due to short-term market phenomena related to the rebound from the pandemic, not any long-term structural issues or limitations in supply. In fact, evidence from the US South, which is our main timber growing region in the US, indicates that an enormous area of trees has been planted in the last decade, providing a reasonably large long-term supply of wood.

Further, supplies of plantation timber in other productive regions of the world, especially South America, but also China, New Zealand, Australia, and parts of Southeast Asia, are expanding. The current high prices for lumber may linger for a while as demand continues to rebound from the pandemic, and due to overall inflationary pressures, but over the next 6 months to a year, prices should stabilize.  And over the longer-run, there will be plenty of wood to go around.

The Accuracy and Informativeness of Agricultural Baselines

by: Siddhartha Bora, a Ph.D. student and Ani Katchova, Professor and Farm Income Enhancement Chair, Department of Agricultural, Environmental, and Development Economics, The Ohio State University

United States Department of Agriculture (USDA) and Food and Agricultural Policy Research Institute (FAPRI), University of Missouri are two main sources of baseline projections for US agricultural sector. Published in the beginning of each year, the baselines provide insight about factors influencing the agricultural sector for the next decade. The projections present a conditional scenario based on certain assumptions about macro-economy, weather, and trade, and serve a basis for comparison of alternative policies. In a new study, we evaluate the accuracy and informativeness of USDA and FAPRI baselines since 1997. We find that the predictive content of most variables in the projections diminish after 4-5 years from the current year, and the USDA and FAPRI models do not outperform one another when entire projection path is considered.

The report is available at: https://aede.osu.edu/sites/aede/files/publication_files/AgBaselines2021.pdf

 

 

Farm Office Live to Analyze USDA’s Pandemic Assistance for Producers Initiative

By Barry Ward, David Marrison, Peggy Hall, Dianne Shoemaker and Julie Strawser – Ohio State University Extension

April’s “Farm Office Live” will focus on details of the USDA’s Pandemic Assistance for Producers” initiative announced on March 24, 2021. Changes were made in effort to reach a greater share of farming operations and improve USDA pandemic assistance.

During the webinar, we will be sharing details about the pandemic initiative and discussing some of the changes made to the Coronavirus Food Assistance Program (CFAP).  Our Farm Office Team will also provide a legislative update and discuss changes to the Paycheck Protection Program and Employee Retention Credits. They will also be on hand to answer your questions and address any related issues.

Two live sessions will be offered on Wednesday, April 7, from 7:00 – 8:30 p.m. and again on Friday, April 9, from 10:00 – 11:30 a.m. A replay will be available on the Farm Office website if you cannot attend the live event.

Farm Office Live is a webinar series addressing the latest outlook and updates on ag law, farm management, ag economics, farm business analysis and other related issues. It is presented by the faculty and educators with the College of Food, Agricultural and Environmental Sciences at The Ohio State University.

To register or view past recordings, visit https://go.osu.edu/farmofficelive.

For more information or to submit a topic for discussion, email Julie Strawser at strawser.35@osu.edu or call the Farm Office at 614-292-2433.

Farm Office Live Continues!

by: Barry Ward, David Marrison, Peggy Hall, Dianne Shoemaker – Ohio State University Extension

“Farm Office Live” continues this winter as an opportunity for you to get the latest outlook and updates on ag law, farm management, ag economics, farm business analysis and other related issues from faculty and educators with the College of Food, Agricultural and Environmental Sciences at The Ohio State University.

Each Farm Office Live begins with presentations on select ag law and farm management topics from our specialists followed by open discussions and a Q&A session. Viewers can attend “Farm Office Live” online each month on Wednesday evening or Friday morning, or can catch a recording of each program.

The full slate of offerings remaining for this winter are:

  • March 10th 7:00 – 8:30 pm
  • March 12th 10:00 – 11:30 am
  • April 7th 7:00 – 8:30 pm
  • April 9th 10:00 – 11:30 am

Topics to be addressed in March include:

  • Coronavirus Food Assistance Program (CFAP)
  • Proposed Stimulus Legislation
  • General Legislative Update
  • Ohio Farm Business Analysis – A Look at Crops
  • Crop Budget & Rental Rates

To register or view past recordings, visit https://go.osu.edu/farmofficelive

For more information or to submit a topic for discussion, email Julie Strawser at strawser.35@osu.edu or call the farm office at 614-292-2433. We look forward to you joining us!